FCA says seven-day switching needs more support

Business banking news review: week ending 26 March 2015

The new seven-day switching rules that allow consumers to give one bank the boot and join another need more support, says the Financial Conduct Authority.

The FCA recently said that based on its own research, too many consumers are either unaware of the new facility or lack the confidence to use it, leading to a much diminished impact for the initiative than it would like. According to the watchdog, personal and business bank account providers in the UK need to raise awareness of the ability in a better way to increase its visibility and to get more consumers switching their current accounts and savings accounts from their existing banks to newer ones.

According to official figures only 1.64 million Brits have switched their accounts since September of 2013, when the initiative was launched. While that figure sounds impressive, the number of people that actually moved accounts in any given months peaked in November of that year – and have yet to recover; in November, more than 105,000 Brits switched, yet less than 92,000 did so last month.

If you ask me, it’s obvious that the system just isn’t working in the way the FCA wanted to, despite the fact that countless Brits complain and whinge about how¬†their existing banks aren’t exactly the best, whether it be due to low interest rates on savings products or just shoddy customer service. It just shows that you might be able to lead a horse to water but you certainly can’t get him to drink, even if he’s dying of thirst; the same applies to British account holders that don’t like their existing bank yet refuse to go through with actually switching to one that might treat them better.

So what’s causing the problem? Is it truly because UK consumers are either unaware of the seven day switch or that they simply don’t trust it? Or is it something else, like widespread apathy holding individuals back from thinking that any new bank they switch to will be any better than their existing one? Honestly I couldn’t tell you, though I am a bit partial to my apathy theory on this one – people, by and large, can be rather stupid when taken together in large groups, and this seems to be no exception.

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